FAILURE TO REACH MINIMUM PRICES DID NOT FRUSTRATE AGREEMENT

In Gold Group Properties Ltd v BDW Trading Ltd (formerly known as Barratt Homes Ltd) [2010] EWHC 323 (TCC), [2010] All ER (D) 216 (Mar) Mr Justice Coulson held that a development agreement had not been frustrated as a result of advice given to the defendant that the properties were unlikely to meet their contractually agreed minimum prices. The agreement remained capable of performance, notwithstanding the impact of the recession. The case emphasizes the fact that the doctrine of frustration operates within very narrow limits. The defendant was therefore in breach of the contract in not proceeding to develop the site but it was held that the defendant was entitled to conditional leave to defend the claim that it had repudiated the contract on the ground that it had an arguable defence that it was the claimant who had repudiated the agreement.